Warning over public sector pensions


Published: Monday 30th March 2015 by The News Editor

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Ministers have been issued with a renewed warning over the affordability of public sector pensions as official figures showed total liabilities have risen to more than £1.3 trillion.

The Chartered Institute of Public Finance and Accountancy (Cipfa) – representing public finance professionals – said there was now “serious concern” over the long-term sustainability of the system.

A note by Cipfa on the UK Whole of Government Accounts (WGA) for 2013/14 said there had been an 11% increase in net public sector pension liabilities over the previous year – a rise of £130 billion.

The increase was one of the main drivers behind a £224 billion rise in overall public sector net liabilities – the difference between what the country owes and what it owns.

Cipfa said that in the five years from 2009/10 net liabilities had risen by £624 billion taking the total to £1.852 trillion, the equivalent of £69,363 for every household in the country.

“While our net expenditure is now on a downward trend, net liabilities continue to increase,” said Cipfa chief executive Rob Whiteman.

“These increasing net liabilities forcefully underline the need for any future government to pay close attention to managing the UK’s balance sheet risk, particularly in the area of public service pensions where there remains a serious concern about longer term sustainability even given the recent reforms.”

The WGA, which cover all 5,500 public entities in the UK – including central government departments, public corporations, the health sector, arm’s-length bodies and local government – is regarded as the most comprehensive set of audited government accounts.

Published: Monday 30th March 2015 by The News Editor

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